US Stock Market Investors Have Lost 20-30% Since 2000

“You can be sure if Wall Street is talking about a stock, it’s in your best interest to ignore it. My simple mantra is: you never make money buying the easy stocks that Wall Street buys.” Says Capital & Crisis’ Chris Mayer.

“You see, brokers and advisers tend to recommend stocks when they are 100% sure they are going up. It’s called momentum. They look for stocks that have been going up for a while, and hope they continue to go up. I would bet that 99% of advisers are incapable of thinking independently.

“By investing in so-called ‘momentum’ stocks, you’re missing out on significant gains. These ‘popular’ stocks have already seen their prices surge, and the rest of Wall Street is happy with the remaining measly returns.”

Since 2000, the feds did all they could to prevent a real correction. They gave consumers and speculators trillions of dollars’ worth of new money. The trouble with this money was the same trouble with the money coming out of the Central Bank of Zimbabwe – it didn’t represent real capital. It was just paper money. It had no real value.

You can’t get something for nothing, we said. But who cares what we say? The gush of liquidity soon had boats floating all over the planet – stocks, houses, planes, paintings – the great gaudy vessels were soon bumping into each other. Everyone was getting richer – or so they thought. And who could argue with them? People had more money…they could buy more things…what was the problem?

The problem was that the boom was phony…at least, mostly…and mostly in the West. It was an ersatz “Crack Up Boom” created by monetary inflation and speculation. It was easy come, easy go wealth…not the real thing.

And now here we are – beginning to see it more clearly. Last week, the US stock market suffered its worst week in five years. At the end of it, guess what? The S&P was actually BELOW its high set in January 2000. Adjust that for inflation and stock market investors – on average – have lost 20% to 30% of their money over the last seven and a half years.

Today, Wall Street will be a little jittery. Maybe prices will go up. Maybe they will go down. It hardly matters. Stocks must get back down in the valley again…until then, we’re not interested.

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.

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